Skip to content

ACCA Strategic Professional · Strategic Business Leader · Internal control and management reporting

Dorne Plc's audit committee is reviewing the annual report before board approval. Which activity falls squarely within the committee's role in monitoring risk and reporting?

Reviewing significant judgements and estimates in the financial statements, and the effectiveness of risk management and internal control systems, is the audit committee's role. Bonus setting, strategy and running controls day to day belong to the remuneration committee, the board and management respectively.

  1. AReviewing the significant judgements and estimates in the financial statements and the effectiveness of the risk management and internal control systemsCorrect
  2. BSetting the executive directors' bonus targets
  3. CDeciding the company's long-term product strategy
  4. DRunning the day-to-day operation of the internal control procedures

Explanation

The committee reviews significant reporting judgements and the effectiveness of risk and control systems. Bonus targets belong to the remuneration committee, strategy to the board and executives, and daily operation of controls is a management responsibility, which the committee only oversees.

Did you get it right without looking?

One question tells you little. A timed set on Internal control and management reporting shows your real accuracy, how long you take and where you lose marks.

Practise Internal control and management reportingFree diagnostic mock

More Internal control and management reporting questions